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Accounting Policies of Shree Surgovind Tradelink Ltd. Company

Mar 31, 2015

2.1 BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS :

i) These financial statements have been prepared in accordance with generally accepted accounting principles in India under the historical cost convention on an accrual basis. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply.

ii) Consequently these financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 211(3C) of the Companies Act, 1956 (Companies (Accounting Standards) Rules, 2006, (as amended) and other relevant provisions of the Companies Act, 2013.

2.2 USE OF ESTIMATES :

The preparation of financial statements in conformity with Indian GAAP requires estimates and assumptions to be made that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

2.3 FIXED ASSETS :

Tangible assets

Tangible assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

Subsequent expenditure related to an item of fixed asset are added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance.

Items of fixed assets that have been retired from active use and held for disposal are stated at the lower of their net book value and net realizable value. Any expected loss, is recognised immediately in the Statement of Profit and Loss.

Losses arising from the retirement of and gains or losses arising from disposal of fixed assets which are carried at cost are recognized in the Statement of Profit and Loss.

Intangible assets

Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangibles assets are amortized on a straight line basis over the estimated useful lives.

Gains or losses, if any arising from the retirement or disposal proceeds and the carrying amount of the asset are recognised as income or expense in the Statement of Profit and loss.

2.4 METHOD OF DEPRECIATION AND AMORTIZATION :

i) Depreciation, on tangible assets is calculated on written-down value basis over the estimated useful lives of the assets.

ii) Effective 1st April 2014, the Company depreciates it fixed assets over the useful life in the manner prescribed in Schedule II of the Act, as against the earlier practice of depreciating at the rates prescribed in Schedule XIV of the Companies Act, 1956.

iii) Cost of Goodwill and trademarks are amortized over the estimated useful lives.

iv) Depreciation on additions to assets or on sale/discardment of assets, is calculated pro rata from the month of such addition or upto the month of such sale/discardment, as the case may be.

2.5 LEASE:

As a lessee: Nil

As a lessor: Where the lessors effectively retain substantially all the risks and benefits of ownership of the leased item the lease is classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

2.6 BORROWING COSTS :

Interest and other borrowing costs attributable to qualifying assets are capitalized. Other interest and borrowing costs are charged to revenue.

2.7 GOVERNMENT GRANTS :

During the year, no grants and subsidies has been received from the Government. Grants and subsidies from the government if any, received against specific fixed assets are adjusted to the cost of the assets and those in the nature of promoter's contribution are credited to Capital Reserve. Revenue Grants are recognized in the Profit and Loss account in accordance with the related scheme and in the period in which these are accrued.

2.8 INVESTMENTS :

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

Current investments are carried at lower of cost or fair value. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments, such reduction being determined and made for each investment individually.

2.9 VALUATION OF INVENTORIES :

Inventories of Raw materials, components, stores and spares, Finished Goods and Stock-in-trade are stated 'at cost or net realizable value, whichever is lower'. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of raw materials, components and stores and spares is determined on a weighted average basis. Cost of finished goods includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

2.10 REVENUE RECOGNITION :

i) Revenues/incomes and Costs/Expenditures are generally accounted on accrual, as they are earned or incurred.

ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of the goods.

iii) Benefit on account of entitlement to import goods free of duty under the "Duty Entitlement Pass Book Scheme" is accounted in the year of export

2.11 STATUTORY AND OTHER TAXES :

Excise duty/Service tax is not applicable to the company. Sales tax/Value Added tax paid is set- off against the collection and in case of payment of earlier years; the same is debited to Profit and Loss account.

2.12 FOREIGN CURRENCY TRANSLATIONS :

i) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place

ii) Monetary items in form of current assets and current liabilities in foreign currency, outstanding at the close of the year are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet.

2.13 EMPLOYEE BENEFITS :

The company at present does not have any retirement benefit for the employees concerned and the staff costs are accounted as period costs.

2.14 TAXATION :

Income-tax expense comprises current and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying the tax rate and the tax laws that have been enacted or substantively enacted at the reporting date. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each balance sheet date, the carrying amounts of deferred tax assets are reviewed to reassure realization. Minimum alternate tax credit (MAT credit) is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date and the Carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

2.15 IMPAIRMENT OF ASSETS :

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.


Mar 31, 2014

2.1 Basis of accounting and preparation of financial statements:

i) The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in alt material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

ii) The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2.2 Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Examples of such estimates are provision for income tax.

2.3 Tangible Assets

Tangible assets are stated at cost of acquisition including interest attributable and financial costs till the date of acquisition and/or installation of the assets and improvement thereon less accumulated depreciation /amortization and accumulated impairment losses if any.

Subsequent expenditure related to an item of other tangible assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and toss for the period during which such expenses are incurred. Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

2.4 Depreciation on tangible assets Depreciation on tangible assets is provided:

i) In respect of buildings and sheds, furniture and office equipments on the written down value method (pro-rata on additions and deletions of the year) at rates prescribed in Schedule XIV to the Companies Act, 1956.

ii) In respect of plant & machinery, on the written down value method at rates prescribed in schedule XIV to the Companies Act, 1956 on a pro-rata basis.

iii) In respect of computers depreciation is provided on written down value on a pro-rata basis.

2.5 Intangible assets

As present the company does not hold any investment in intangible assets, hence no accounting policies has been formulated. Suitable accounting policies will be formulated if any future investments are made in intangible assets in future.

2.6 Impairment of tangible and intangible assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimates the asset's recoverable amount and determines accounting policies taking into consideration AS-28 Impairment of assets issued by ICAL

2.7 Leases

Where the lessors effectively retains substantially all the risks and benefits of ownership of the leased item the leased Cold Storage are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

2.8 Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur

2.9 Government grants and subsidies

At present, no grants and subsidies has been received from the Government. Hence no accounting policy had been formulated in this regard

2.10 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investment. Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Costs of investments include acquisition charges such as brokerage, fees and duties.

2.11 Inventories

Items of Inventories are valued at the lower of cost (on Weighted Average Cost basis) and the net realizable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the warehouse, including applicable taxes and other levies, transit insurance etc.

2.12 Revenue recognition

Sales:- Revenue is recognised when the title of the goods including all risks and rewards of ownership has been transferred to the buyer and the, seller retains no effective control of the goods transferred to a degree usually associated with ownership and where the consideration is reliably measured and it is reasonably certain to expect ultimate collection. Revenue from operations includes sale of goods and services in respect of cold storage business and interest incomes but excludes sales tax and value added tax.

Income:-The Company recognizes the income on accrual basis. However where the ultimate collection of the same lacks reasonable certainty, revenue recognition is postponed to the extent of uncertainty. Interest is accrued over the period of the loan/investment. Dividend is accrued in the year in which it is declared whereby a right to receive is established. Profit /loss on sale of investments are recognized on the contract date. Benefit on account of entitlement to import goods free of duty under the "Duty Entitlement Pass Book Scheme" is accounted in the year of export.

2.13 Statutory and other taxes

Excise duty/Service tax is not applicable to the company. Sales tax/Value Added tax paid is set-off against the collection and in case of excess payment of earlier years; the same is debited to Profit and Loss account.

2.14 Foreign currency transactions and translations

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction. Monetary items denominated in foreign currencies at the year end and are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year-end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract. Any income or expenses on account of exchange differences either on settlement or on translation is recognized in the Profit and loss account. Financial derivatives and hedging contracts are accounted on the date of their settlement and realized gain /loss in respect of settled contracts is recognised in the statement of profit and loss along with the underlying transactions.

2.15 Employee benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in profit and loss account of the year in which the related service is rendered. The Company does not have a system of retirement benefits except Provident Fund for which Contributions are made from time to time. Provident fund contribution are based on defined contribution plans.

2.16 Income taxes

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the income Tax Act, 1961. The income taxes on the assessments completed till date are adjusted against their corresponding provisions maintained in the Balance sheet.

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets are recognized only to the extent that there is a virtual certainty that the asset will be realized in future.

2.17 Segment reporting

a. Identification of segments

At present the company deals only in a single segment of Trading of Spices, Dry Fruits and Pulses, hence the company's operating businesses are organized and managed accordingly and no further segment identification is done and no such accounting policies in respect to disclosures of the same. Although the company manages Cold storages, the gross income from the same is not more than 10% of the Gross Revenue of Sales of the company and therefore no separate segment reporting are done for this activity.

2.18 Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares if any, are treated as a fraction of equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating Diluted earnings per share, the net profit or toss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2.19 Provisions

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Where the company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement. -

2.20 Contingent liabilities and Contingent assets

Contingent liabilities are not recognized but disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

2.21 Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

2.22 Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss account. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.


Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The Company maintains its accounts on accrual basis. Management makes estimates and technical and other assumptions regarding the amounts of income and expenses in accordance with Indian GAAP in the preparations of financial statements. Differences between the actual results and the estimates are recognized in the periods in which the results are determined.

During the year ended March 31,2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

1.2 Fixed Assets

Fixed assets are stated at cost of acquisition including attributable interest & financial costs till die date of acquisition/installation of the assets and improvement thereon less accumulated depreciation / amortisation and accumulated impairment losses if any. Intangible assets comprise of implementation cost for software and other application software's acquired for in-house use.

1.3 Depreciation and Amortisation Depreciation on fixed assets is provided:

i) In respect of buildings and sheds, furniture and office equipments on the written down value method (pro-rata on additions and deletions of the year) at rates prescribed in Schedule XTV of the Companies Act, 1956.

ii) Hi respect of plant & machinery, on the written down value method at rates prescribed in schedule XTV of the Companies Act, 1956 on a pro-rata basis.

iii) In respect of computers depreciation is provided on written down value on a pro-rata basis

iv) The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization method is revised to reflect the changed pattern.

1.4 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount The recoverable amount is the greater of the net selling price and their value in use Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.

1.5 Foreign currency transactions and translations

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Monetary items denominated in foreign currencies at the year end and are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year- end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the rife of the contract

Non-Monetary foreign currency items are carried at cost

Any income or expenses on account of exchange differences either on settlement or on translation is recognized in the Profit and loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

1.6 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classifies as long-term investment Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Costs of investments include acquisition charges such as brokerage, fees and duties.

1.7 Inventories

Items of Inventories are valued at the lower of cost (on FIFO basis) and the net realizable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.

1.8 Revenue recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to except ultimate collection. Revenue from operations includes sale of goods and services but excludes sales tax and value added tax. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportionate basis taking into account the amount outstanding and rate applicable

1.9 Excise Duty/Service Tax and Sales tax/Value Added Tax

Excise duty/Service tax is accounted on the basis of both, payments, made in respect of goods cleared/service provided as also provision made for goods lying in bonded warehouses, if any. Sales tax/Value Added tax paid is set-off against the collection and in case of excess payment of earlier years; the same is debited to Profit and Loss account

1.10 Employee benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in profit and loss account of the year in which the related service is rendered The Company does not deal with post employment and other long term employee benefits

1.11 Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as a part of the cost of such asset Other borrowings costs are charged to statement of profit and loss as incurred.

1.12 Financial Derivatives and Commodity hedging transactions

Financial derivatives and hedging contracts are accounted on the date of their settlement and realised gain/loss in respect of settled contracts is recognised in the statement of profit and loss along with the underlying transactions.

1.13 Provision for Current and deferred tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with title provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing differences, being die differences between the taxable income and the accounting income. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets are recognized only to the extent that there is a virtual certainty that the asset will be realized in future.

1.14 Provisions, Contingent liabilities and Contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of a past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared in accordance with applicable accounting standards issued by the Institute of Chartered Accountants of India and the relevant presentational requirements of the Companies Act, 1956. A summary of important accounting policies applied are set out below:-

1) ACCOUNTING CONCEPTS

These accounts are prepared under historical cost convention on an accrual basis and follow the accounting principles of a going concern.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

2) USE OF ESTIMATES

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that may affect the reported amount of assets and liabilities as at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated.

3) INVENTORIES

As per Accounting Standard - 2, inventories have been valued at cost or Market Value whichever is lower.

4) CASH FLOW STATEMENTS

The Cash flow Statement is prepared under "Indirect Method" set out in Accounting Standard -3 on "Cash Flow Statements" and presents the-cash flow by operating, investing and financing activities of the company.

5) FIXED ASSETS

Fixed assets are stated at cost of acquisition less accumulated depreciation and accumulated impairment losses if any. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use.

6) DEPRECIATION

Depreciation on fixed assets is provided at the rates specified in the companies Act, on Written Down Value method.

7) INVESTMENTS

Long Term Investments are stated at cost. No provision for diminution in value of investments is made in the books of accounts.

8) REVENUE RECOGNITION

in Sale is recognised when the title of the goods, including all risks and rewards of ownership has been transferred to the buyer and the seller retains no effective control of the goods transferred to a degree usually associated with ownership and;

(ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of the goods.

9) EMPLOYEE RETIREMENT BENEFITS

(i) The management is of the opinion that since none of Employees of the company were in continuous service for more than five years, making Provision of Gratuity does not arise. The management is also of the opinion that the payment of Pension Act is not applicable to the Company.

(ii) Provident Fund is not applicable to the company.

10) TAXES ON INCOME

Provision for Income Tax

Provision for current tax is made on the assessable income computed for the accounting year in accordance with the provisions of Income-Tax Act, 1961.

Deferred Taxation

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting incomes that originate in one period and are capable of reversal in one or more subsequent periods and is quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

In compliance with the Accounting S:andard-22 relating to "Accounting for taxes on Income", the deferred tax liability of current year is debited to Profit & Loss Account.

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